US vs China trade deal update
The more things change, the more they stay the same.
This quote seems appropriate to explain the current status of the ongoing US and China trade talks.
In this week’s episode of the Rich Dad Radio Show, Robert Kiyosaki welcomes back his friend and macro-economic expert, Richard Duncan (Corruption of Capitalism, The New Depression, The Dollar Crisis).
Richard (former economist at both the IMF and World Bank), lives in Bangkok, Thailand but continues to predict the future of capitalism and socialism around the world, including here in the US.
President Trump and the widening US and Chinese trade deals
“Nero fiddled as Rome burned,” aptly explains Robert’s thoughts on the status of the US economy.
As Richard sees it, the US is currently in contentious trade talks with China, which is probably the biggest geopolitical issue since the fall of the Soviet Union. President Trump is digging in his heels and is ultimately trying to stop China’s rise to power by any means necessary.
If China continues its rise like it has over the last few decades, they will be positioned to take the top spot as the world’s supreme economic superpower.
Richard brings up the tariff’s that President Trump has applied to big Chinese manufacturers like Huawei. Richard and Robert share the belief that China will have no choice but to retaliate if the US continues to strong-arm Chinese businesses.
Richard’s advice to President Trump on the US and Chinese trade talks
When asked what Richard would advise President Trump to do, he recommends we follow the Chinese government’s lead by investing in 21st century industries like artificial intelligence (AI), genetic engineering, biotech, nanotechnology, neuroscience, and robotics. He knows the trillions of dollars the US government could invest would payoff for decades to come.
What does Robert see while he travels the globe? The same thing Richard does. While the US government focuses on increasing its friction with the Chinese government, China is dumping trillions of dollars worth of investment into the very same industries that Richard recommends the US do.
With such explosive investment capital that the Chinese invest into the future, Robert asks if there’s anything good about the situation for the US.
Even though things look dire for the US government, the people of the United States still have one thing going for them: more purchasing power.
The Chinese still require the average US citizen to purchase products they manufacture, for now.
The US and Chinese trade deals effect on inflation
Won’t it lead to inflation?
Now that President Trump has placed 25% tariffs on $250 billion worth of Chinese goods and threatening another $300 billion, its highly likely.
And because the global economy is crashing, however slowly, the price of oil is crashing as well. Even while the US continues to take Iran’s oil off the market to push the price higher, the prices continue to plunge.
Though the prices of gold and oil historically track very closely, gold continues to rise while oil continues its plunge.
So what is the average person to do?
How does the US and Chinese trade talks affect you?
Richard and Robert agree: mind your own business.
Make your business as recession-proof as possible. Invest in rental properties and the land beneath them.
Is the US a capitalist or socialist economy
First, a quick recap of how capitalism started. At the beginning of the 19th century, there were no laws and businesses could basically do whatever they wanted. There were no laws protecting people (including children) from being taken advantage of. This included a lack of protection for the elderly who, like us all, eventually could no longer contribute to society.
As we entered the 20th century, however, our government implemented social programs like Social Security and unemployment insurance. So for the better part of the past 75 years, we’ve been living in a very socialist society.
While living conditions for the masses has improved, so has the income inequality between the rich and the poor. If things continue along this path we will have something closer to an oligarchy where there will only be the uber-rich… and the rest of us.
AIR: June 19, 2019